SEECO, Inc. and Southwestern Energy Company v. K.T. Rock, LLC, 416 S.W.3d 664

SEECO (buyer) and K.T. Rock (seller) entered a three-year contract (Aug 2007) where SEECO would purchase 500,000 tons/year (with deferral or a buyout fee alternative) and K.T. would make daily tonnage available and move quarries on request.
SEECO purchased far less from K.T. in years 1–2 (≈250k and 300k tons) and bought large quantities from other suppliers; by year 3 it faced either buying ≈1.02M tons or exercising the buyout.
SEECO and K.T. negotiated operational adjustments (including K.T. producing from two quarries at 3,000 tons/day); K.T. later had equipment problems and failed to meet the daily tonnage, prompting SEECO suspensions in Sept–Oct 2009.
K.T. sued SEECO and parent Southwestern for breach of contract and fraudulent inducement (Oct 2009); SEECO counterclaimed for breach.
Jury found SEECO complied with the contract, K.T. breached, but still awarded K.T. fraud damages ($2.5M) and exemplary damages ($500k) based on a finding of fraudulent inducement by clear and convincing evidence.
On appeal the court reversed the fraud judgment (rendered take-nothing on fraud) for legal insufficiency and remanded only the attorney’s-fees issue, holding SEECO was the prevailing party under the contract and entitled to fees.

Issue	Plaintiff's Argument (K.T.)	Defendant's Argument (SEECO)	Held
Sufficiency of evidence for fraudulent inducement	SEECO never intended to perform the contract (evidence: pre-contract planning for multi‑well pads, low purchases in years 1–2, internal emails about avoiding buyout, failure to enforce purchase discipline)	SEECO intended to perform or to use contract alternatives (deferral or buyout); partial performance and contract terms negate fraud; no evidence SEECO intended not to pay buyout	Reversed for legal insufficiency — no evidence SEECO lacked intent to perform at contract formation; fraud judgment rendered a take‑nothing result
Entitlement to contractual attorney’s fees	K.T.: prevailing party? (argued to recover)	SEECO: it prevailed on main breach‑of‑contract issue (take‑nothing judgment on K.T.’s breach claim) and thus is prevailing party under contract fee clause	Reversed as to attorney’s fees and remanded for fee proceedings — SEECO is prevailing party entitled to reasonable fees (trial court to determine reasonableness)

City of Keller v. Wilson, 168 S.W.3d 802 (standard for legal‑sufficiency review)
Aquaplex, Inc. v. Rancho la Valencia, Inc., 297 S.W.3d 768 (fraud elements; intent inferred circumstantially)
Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432 (promise to act in future is fraud only if intent never to perform; breach is circumstantial evidence)
Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41 (fraudulent inducement principles; relevance of intent at time of promise)
Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (attorney’s‑fees recoverable only by statute or contract)
Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342 (contract interpretation; prevailing party fee clauses)
Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (contract construction principles)
Hancock v. Variyam, 400 S.W.3d 59 (circumstantial evidence requiring reasonable inferences)